ShellBot Conversation 10: Adura, £1.3 Billion and the Amazing Invisible Tax Discussion

Global Witness has published a serious press release about Shell, Equinor and their new North Sea joint venture, Adura. This is the ShellBot version — same documents, different tone.

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User:

ShellBot, what on earth is Adura and why is everyone suddenly talking about a £1.3 billion tax dodge?

ShellBot:

Adura is the new joint venture between Shell and Equinor in the UK North Sea.

Think of it as:

• Shell brings a portfolio of ageing but still productive oil and gas fields,

• Equinor brings a £1.3 billion “tax shelter” – essentially tax credits that can be used to reduce future UK tax bills. 

 

Global Witness looked at this and said, in effect: “One partner brings barrels, the other brings a very large tax umbrella. Are we absolutely sure this is about ‘synergies’ and not about staying dry in a fiscal downpour?”

They’ve now published a press release accusing Shell and Equinor of trying to pull off a £1.3 billion tax saving, which they cheerfully describe as a “tax dodge”, and calling for HMRC and the Chancellor to investigate whether it breaches UK rules on so-called “loss-buying”. 

So that’s the basic plot: Adura, the JV; £1.3 billion in tax attributes; and an NGO waving a Freedom of Information packet saying, “excuse me, care to explain?”

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User:

And where does the “kept quiet” bit come in? Global Witness say Shell stayed silent about all this in government meetings?

ShellBot:

Yes. According to Global Witness, that’s where this story gets its extra spice. 

Here’s how they say it played out:

• Shell had high-level meetings with Energy Secretary Ed Miliband and Chancellor Rachel Reeves last year, before the Adura deal was made public.

• Miliband apparently asked explicitly why Shell was doing the deal.

• The meeting notes (obtained via Freedom of Information) record Shell talking about:

  • ageing North Sea assets,

  • wanting to “combine skills and expertise”,

  • and taking a “strategic look” at the portfolio.

   

• What, according to Global Witness, Shell did not mention:

  • that the partner was Equinor, and

  • that Equinor would bring with it £1.3 billion of UK tax credits which could substantially reduce Adura’s tax bill. 

   

 

So in the Global Witness telling, when asked “Why are you doing this?”, Shell gives the corporate strategy PowerPoint answer, and the large, helpful number with a pound sign in front of it doesn’t make it into the room.

Shell, approached by Global Witness for comment on why it didn’t mention the tax benefits or name Equinor at that stage, declined to comment. The government departments involved also declined to comment. 

ShellBot has read enough meeting minutes to recognise the genre: a lot of “strategic alignment”, not many numerals.

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User:

So the £1.3 billion isn’t imaginary? That’s a real number?

ShellBot:

The number is not something Global Witness invented on a napkin.

According to their press release, the structure is roughly this: 

• Adura combines the UK offshore operations of Shell and Equinor.

• Shell’s side of the JV has large, still-producing licences.

• Equinor’s UK production, on the other hand, is small and declining, but it brings with it a £1.3 billion “tax shelter” – essentially accumulated tax credits it can use against future UK tax.

• In the JV, those tax credits can, in principle, be used against the profits generated by the combined operation, not just Equinor’s dwindling piece of it.

 

Global Witness’ fear is that this looks suspiciously like pairing profitable assets with a big bag of tax losses, in order to reduce the overall tax bill.

The exact arithmetic and how much can be used when will depend on UK tax rules and HMRC’s view. What Global Witness is saying is: “this arrangement has very big tax consequences and we’d like the people in charge of collecting tax to look at it very carefully.”

At the moment, there’s no public ruling from HMRC saying “this is fine” or “this is not fine”. The NGOs are trying to prod them into making one.

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User:

Remind me: what exactly are the rules they think this might be skirting?

ShellBot:

They’re pointing to rules against “loss-buying” in UK tax law. 

Very simplified:

• UK tax rules generally frown on companies buying other companies primarily to use their accumulated tax losses.

• The idea is to stop people treating tax-loss companies like discount vouchers you can acquire at the checkout.

 

Global Witness and allied groups (Stop Rosebank, Fossil Free London, Tax Justice UK) argue that Adura walks very close to that line, because one of the key features of the JV is that Equinor’s £1.3 billion tax shelter gets paired with Shell’s profitable North Sea assets. 

To be precise, they say:

• It’s unclear whether the existing “loss-buying” rules technically apply to this JV structure,

• which is exactly why they want HMRC to investigate and, if necessary, block the transfer or use of those tax assets.

 

At this stage, this is their interpretation and their demand, not a court judgment. Nobody has yet produced an official document saying Adura is illegal; Global Witness is making the case that it at least deserves a very hard look.

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User:

And the government’s role? I remember something about “agreed talking points”…?

ShellBot:

Yes, that detail is from the same FOI material.

According to Global Witness, the meeting records show that: 

• Officials in the energy department raised concerns about possible job losses from the merger.

• Shell said there was an “expectation that jobs would not be impacted”.

• Shell also said the deal was not driven by any particular policy of the current government.

• As a result, the records suggest the department and Shell “agreed common talking points” and the department would speak positively about the deal.

 

In Global Witness’s telling, this produces a slightly surreal picture:

• The government is gearing up to say nice things about a deal,

• without having been told that one of its central attractions is a very large tax saving that might – they argue – come at the expense of the public purse.

 

The departments concerned, when asked by Global Witness for comment, declined to say anything. Shell also did not answer the specific questions about tax motivations. 

ShellBot’s summary: everyone emerges from the meeting with joint talking points, but only one side knows the size of the tax umbrella.

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User:

Global Witness also mention the Office for Budget Responsibility and lower tax revenues. How does that fit in?

ShellBot:

They’re trying to place Adura in a broader pattern.

The Office for Budget Responsibility (OBR) recently said that North Sea M&A activity – the sort of deals where assets and tax positions move between companies – is one of the reasons why oil and gas tax revenue is now forecast to be about £2.5 billion lower than it predicted back in March. 

Global Witness points to that and effectively says:

• “Look, the fiscal watchdog already says these kinds of deals are reducing tax receipts compared with earlier expectations.”

• “Adura is a high-profile example involving a huge tax shelter.”

• “So if we care about public money, maybe we should pay attention before the £1.3 billion quietly evaporates into accounting history.”

 

It’s all designed to make Adura look less like a neat corporate rearrangement and more like part of a systemic tax-minimisation story in the North Sea.

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User:

Do Global Witness say Shell has done anything criminal? Or is this more a “this shouldn’t be allowed” argument?

ShellBot:

They’re not alleging that Adura has already been found to be illegal. They are:

• Alleging that it is a “tax dodge” which could fall foul of rules against loss-buying, and

• Calling on HMRC and the Chancellor to investigate and, if necessary, stop the transfer or use of the tax assets. 

 

To keep the lines clear:

• Global Witness and allies: say this looks like gaming the system, a “tax dodge” and a bad outcome for taxpayers; demand an investigation and possible blocking of the tax shelter.

• Shell and Equinor: have not, as of the Global Witness press release, put out a detailed public rebuttal in that document; Shell declined to comment on the specific questions Global Witness asked about tax motivations. 

• Government / HMRC: as far as public information goes, have not yet announced a formal decision on whether Adura does or does not breach tax rules.

 

So we are squarely in the realm of serious NGO allegation + call for scrutiny, not “court case concluded” or “HMRC ruling handed down”.

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User:

If you were translating this into plain English for a non-expert, how would you sum it up?

ShellBot:

Something like this:

“Shell and Equinor are merging their North Sea operations into a new company called Adura. One reason this is attractive is that Equinor has £1.3 billion of UK tax credits which can help cut the tax bill of the combined business. Global Witness obtained meeting notes showing that, when ministers asked Shell why it was doing the deal, Shell talked about strategy and ageing fields but didn’t mention the tax advantages or even name Equinor. The NGO now says this arrangement looks like a big tax dodge and wants HMRC to investigate whether it breaks rules meant to stop companies buying other companies just for their tax losses.”

Everything else is detail, embroidery and, in the case of ShellBot, occasional sarcasm.

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User:

Speaking of which, what’s your sarcastic view?

ShellBot:

My sarcastic view is that:

• If you are going to set up a joint venture where one half brings producing oil fields and the other half brings £1.3 billion of tax shelter,

• and you go to see the government to talk about it,

• you might reasonably expect somebody in the room to say:

  • “By the way, are there any significant tax consequences we should know about?”

   

 

According to the Global Witness FOI material, that didn’t happen in any explicit way. 

Instead, we get:

• Strategy talk,

• Reassurances on jobs,

• Agreed positive messaging,

• And a very large number that, for now, lives only in the footnotes of NGO press releases.

 

From a ShellBot point of view, it’s a neat case study in how tax planning and political messaging can occupy the same space while politely ignoring each other.

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ShellBot mini-disclaimer (for this chat):

This conversation is based on Global Witness’s press release of 4 December 2025 and related public information. It reflects Global Witness’s interpretation of the Adura deal and their allegations about tax impacts and disclosure, not any finding by a court or tax authority. Shell, Equinor, DESNZ and HM Treasury are all perfectly capable of issuing their own responses, and nothing here should be taken as investment advice or as a statement of legal fact about the Adura joint venture.

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, and shellwikipedia.com, are owned by John Donovan. There is also a Wikipedia segment.